Building the New Normal

[GRG55]

Re: Building the New Normal

This might be the first thing you've posted that I disagree with :p

Why use only one worthless fiat currency when you can use 3 ??

1) Cash
2) Credit card
3) Air Miles / Points

Yes - get a big stash of cash (3 months or more worth) and stick it in your favourite safe. You'll need it in about 18 months. ;)

Buy everything on the credit card. Use the points for crap that only lasts a few years anyway. We just had Christmas for free iTouch, iPhone, digital camera, flights etc.

I pay the bills off with "cash" in my eBank - before the statements even get mailed out - just to rub their faces in their stupid currency system.

I don't know where you live - but here if you try to use a $50 or $100 bill they look at you like you're a leper, and tell you they won't take it !!! Even retailers don't trust the worthless $hit. Pay with a gold Visa and they treat you like a king. Go figure - because that reduces their profits.

Think about that.

Like you I live in Western Canada. Can't say I have ever had a problem with any retailer here accepting my cash. The only place where I ever had a problem passing a Canadian $100 bill was last year in London when I went to an HSBC branch and wanted to exchange some coloured Canadian paper with the Queen's picture for some coloured UK paper with the Queen's picture - they took all the other denominations I offered, but not the $100.

I do buy your point about retailers treating you like a King when you flash that Gold Visa...they probably [rightly] know that most people buying on credit will spend more in their establishments than those of us tight fisted misers using Her Majesty's money...

I notice that some of the credit card companies, including the Amex commercials I mentioned [and you have probably also heard those commerical on the radio] make a big deal about the reward points that can be earned by using the card to buy gas and groceries. Fair enough, for those that want to administer all that.

But I place a high value on simplifying my life, and the range of loyalty programs being offered to me every time I do anything [like book a hotel] is well beyond anything I am prepared to deal with.

Finally, and this is quite important, I use cash because I don't want retailers, banks/credit card co's, or the government tracking all my spending habits - it's bad enough that I have to use a credit card to book hotels, air tickets, rental cars or buy a book from Amazon.

[WildspitzE]

Re: Building the New Normal

(with thanks to MEGA)

Tracy Residents Now Have To Pay For 911 Calls

Tracy, Ca: Tracy residents will now have to pay every time they call 9-1-1 for a medical emergency.

But there are a couple of options. Residents can pay a $48 voluntary fee for the year which allows them to call 9-1-1 as many times as necessary.

Or, there's the option of not signing up for the annual fee. Instead, they will be charged $300 if they make a call for help.

"A $300 fee and you don't even want to be thinking about that when somebody is in need of assistance," said Tracy resident Greg Bidlack.

Residents will soon receive the form in the mail where they'll be able to make their selection. No date has been set for when the charges will go into effect.

http://cbs13.com/local/tracy.911.calls.2.1502690.html

Will Easy-Payment-Plans soon be made available? Wells Fargo :rolleyes:

So, one person gets the plan in the neighborhood / building and everybody calls him /her when there is an emergency, so that then he /she calls 911? Neighborhood watch now includes 911.

[don]

Re: Building the New Normal

Florida Update on the New Normal:

My buddy running a construction job outside Daytona called and told me one of workers requested a $2/hr raise. He's being divorced, his car broke down, etc. In short he's up against it. My buddy passed on his request (he's the job super) and noted he's a good worker and without some help, probably won't be. The raise was denied.

When my buddy came to the site this morning about $50,000 worth of damage had been done to their machines. The guy who wanted the raise didn't show. (My buddy had put his handgun in his car that morning, just in case.) The guy asking for the raise is in his early 60s.

As we enter the second phase of the credit collapse, are we nearing another national divide. Does decades of illusion + base ignorance divided by rapacious predators = a National Nervous Breakdown.

By now many 'middleclass' Americans have exhausted their monetary resources, their friends and family assistance, and their personal psychic reserves. Will that component of the political side of the economy make itself felt?

(tangentially, with prisoners getting early-outs across the land, and finding no work, they're violating their parole to go back in for 3 squares and a bed. The unemployment rate for minimum wage workers- $12,500 a year- is over 30%. That's a No Exit situation.)

[thriftyandboringinohio]

Re: Building the New Normal

Florida Update on the New Normal:



As we enter the second phase of the credit collapse, are we nearing another national divide. Does decades of illusion + base ignorance divided by rapacious predators = a National Nervous Breakdown.

By now many 'middleclass' Americans have exhausted their monetary resources, their friends and family assistance, and their personal psychic reserves. Will that component of the political side of the economy make itself felt?

The psychology of this could get ugly indeed.

[jpatter666]

Re: Building the New Normal

I use a credit card for convenience, the cash back, and the doubling of the warranty it gives me on most things I buy. I couldn't even tell you the interest rate because I pay it off every month, at least one week early. It's also a good way of knowing exactly what you are spending. Cash tends to disappear and you don't even remember where it went. I can look at the statement and see if I'm spending too much on booze and hookers every month. I got $75 off a TV I bought at Christmas just for using one card. If you are clever you can find tons of ridiculous deals out there as the credit card companies try to outdo each other trying to get you into debt. If you shop mainly online like I do, its also about the only good way to buy things. But cash is good too. Makes you think twice when you are pulling out those hard earned Benjamins.

We refuse to have a debit card. Those scare me.

Yep, this is us as well. I like the ability to see where the money has gone (much harder to do that with cash).

And the points have paid half (or more) of our vacation flights each year.

I use mint.com as a tracking tool. It's helped us gain a much better understanding of monthly finances.

[jk]

Re: Building the New Normal

I can't think of a more stupid use of credit than to purchase short term consumables.

1. convenience, plus i get the float. i always pay the balance in full and on time, so no interest charges or fees.
2. for gasoline, in particular, i have a card that pays me back 5% of the charge. on groceries i get back 2-3%

[GRG55]

Re: Building the New Normal

Florida Update on the New Normal:

My buddy running a construction job outside Daytona called and told me one of workers requested a $2/hr raise. He's being divorced, his car broke down, etc. In short he's up against it. My buddy passed on his request (he's the job super) and noted he's a good worker and without some help, probably won't be. The raise was denied.

When my buddy came to the site this morning about $50,000 worth of damage had been done to their machines. The guy who wanted the raise didn't show. (My buddy had put his handgun in his car that morning, just in case.) The guy asking for the raise is in his early 60s.

As we enter the second phase of the credit collapse, are we nearing another national divide. Does decades of illusion + base ignorance divided by rapacious predators = a National Nervous Breakdown.

By now many 'middleclass' Americans have exhausted their monetary resources, their friends and family assistance, and their personal psychic reserves. Will that component of the political side of the economy make itself felt?

(tangentially, with prisoners getting early-outs across the land, and finding no work, they're violating their parole to go back in for 3 squares and a bed. The unemployment rate for minimum wage workers- $12,500 a year- is over 30%. That's a No Exit situation.)

Maybe it's not nearing another national divide...maybe the one that already exists, built up over many years, is finally becoming abundantly visible, now that the niqab of cheap credit and asset bubble wealth creation has been stripped away?

Just imagine how bad this is going to get when the Great Inflation really starts to kick in later this decade...

[raja]

Re: Building the New Normal

Just imagine how bad this is going to get when the Great Inflation really starts to kick in later this decade...

My imagination apparently knows no bounds :eek:

I can't see how THEY will keep it all together without nationalizing food and energy.
And, there will be lot's of crime . . . as many people who are accustomed to having will now have not.

I've put in a metal door in a back bedroom, with an old-fashioned wooden cross bar "lock", i.e., created a "safe" room. I've erected a second metal gate on the property to deter drive-up thieves. Lately I've been wondering whether I should erect a wall around my fields with road frontage . . . to keep anyone from jumping in and snatching a goat, sheep or chicken. (I figure they'd have trouble getting an 900 lb. cow into their pickup.)

So . . . I see your jtabeb, and raise you a raja :eek: ;)

[thriftyandboringinohio]

Re: Building the New Normal

(I figure they'd have trouble getting an 900 lb. cow into their pickup.)

They won't take the whole cow; they'll just take the top half between shoulders and hips.:eek:

[thriftyandboringinohio]

Re: Building the New Normal

Maybe it's not nearing another national divide...maybe the one that already exists, built up over many years, is finally becoming abundantly visible, now that the niqab of cheap credit and asset bubble wealth creation has been stripped away?

Great point. The illusion is gone that we can all live like movie stars, but it was never true. Of course it will still feel to most people like something was taken away from them.

[ThePythonicCow]

Re: Building the New Normal

They won't take the whole cow; they'll just take the top half between shoulders and hips.:eek:

If they have a good border collie and a loading ramp on their truck, they can get the whole cow. Those dogs will put a cow just about any place a cow can get to.

[ASH]

Re: Building the New Normal

NEW YORK (Reuters) - More generations are living under the same roof and the trend will deepen as families grappling with near double-digit unemployment share expenses, a study showed on Monday.

A most engrossing thread, Don. Just finished reading everyone's responses, so far.

I thought I'd comment that, oddly, living in a multi-generational house is something I think I'd prefer... it was (and sort of, still is) my long-term plan. And this isn't out of financial necessity.

A lot of grim discussion here about the rolling snowball, and anecdotes about people being pressed by their finances. I fired another Ph.D. a few weeks ago; we may have layoffs soon if we don't get more contracts in-house. It used to be that a higher degree in an engineering field, plus some work experience, was really good insurance against other than temporary joblessness. Now I wonder. Rising median duration of unemployment has got to apply at this end of the labor market as well. (Unemployment may be lower in higher income brackets, but that doesn't necessarily mean anyone is hiring very fast if you do lose your job.) I wonder how I'd fare myself if/when this little startup runs out of gas, and I need to find another gig.

The 'new normal' has to be a level of consumption that matches our actual productivity, rather than the credit-fueled binge of past years. Getting there cannot but be painful; it will lead to friction and resentment between the ever-smaller stratum who manage to preserve their earning power, and everyone else.

[iyamwutiam]

Re: Building the New Normal

Perhaps thought should be given that when a slew of industries depend on over-consumption that they collaborate together to create a 'reality'. The reality which becomes self-fulfilling for whatever temporal limit it may have.

I am sure the Talking Heads addressed this obliquely in Burning down the house. However -the deeper and most important question is -

Why would you blame the victim? Thats like saying saying so what if 5 of the 6 poker players at the table are in cahoots -you could always walk away. Except you can't since the room is locked.

I may not have made my point with the utmost clarity -however -I have seen many people follow the 'borrow someone else's money for x% and invest in a vehicle (business/house/education) where I can make x+c% return. Many were successful in the days of easy credit, 'always' rising housing process and as Ash mentioned -increasing renumeration and security for higher education.

Sort of like giving the lone poker player a'stake' in the game and making him feel that he is winning and the game is fair. It just depends when they wish to take a big pot from you -usually its a crash -70's/80s/internet bubble/credit crisis -and many have lost a sizable chunk during that time.

Of course the response -particularly in capitalist societies is to laud, propagate and idolize the few winners of slot machines, etc in the casino -to erase the reality that an overwhelming and statistically undeniable number of people lose. To assuage their aggreivement -we proffer more commodities such as attractive men/women/alcohol/magic shows and of course the ubiquitous circus.

The point is many in the world have always had an inkling of the sins of inequity being foisted upon our brethren near or far. It is somewhat like the tale of Gunga Din -a good chap was he -that served the cause of winning -while his whole nation, kith and kin , culture were slowly and methodically being robbed for the benefit of others.

Bertrand Russell's -In praise of idleness may also be a good refresher for some.

[don]

Re: Building the New Normal

A most engrossing thread, Don. Just finished reading everyone's responses, so far.

I thought I'd comment that, oddly, living in a multi-generational house is something I think I'd prefer... it was (and sort of, still is) my long-term plan. And this isn't out of financial necessity.

Decades ago, Ash, I mused over what my family could do if we were willing to live collectively. My Dad was still in business, I was an electrical contractor, my wife had her career, my sister had an accounting business, my brother a computer engineer at IBM, his wife a blue-collar engineer. None of us was rich but together we had some dollar clout. I envisioned a rural life style, individual domiciles spread over a few acres.

I did have a customer, a wallpaper factory owner we serviced, who did pull it off. He was a member of a 14 person collective that owned 60 acres where each member had living space. Some lived with shared common space- kitchens, etc- others separately. The kicker with these guys were they were all gay males. That may have made the operation work. The nuclear family ideology doesn't allow collective bargaining.

[ASH]

Re: Building the New Normal

The kicker with these guys were they were all gay males.

Ha! :rolleyes: And all I had envisioned was maybe having my parents -- or the inlaws -- under the roof to avoid loneliness and isolation in old age, and maybe read to the kids!